The Minister of Finance, Margaret Mwanakatwe has issued a Statutory Instrument no.42 of 2018 to operationalise and strengthen the new Public Finance Management Act no. 1 of 2018.
The Act has for the first time given fiduciary duties to management and boards and made them accountable individually and severally for their decisions.
This means that members of management and boards can actually be imprisoned for loss of money to corruption, fraud or theft that occurs under their watch or reign.
The Act has been made to close-up gaps and help promote public financial management.
The Act is far reaching and since 2004, there has not been legal reforms to improve financial oversight role and integrity in public financial management took a nosedive.
The Public Finance Management Act has also promoted over-sight institutions of the Auditor General and Controller of Internal Audits and have become divisions headed by a Permanent Secretary.
Accounting Units in Ministries, Provinces and Other Spending agencies(MPSA’s) have been elevated to directorate level.
The Act has embedded provisions to facilitate the Treasury Single Account (TSA) and Integrated Financial Information Management System (IFMIS).
The Act has also addressed concerns around financial irregularities existent in local authorities.
The Act has outlined fiduciary duties for boards and management of State owned enterprises and statutory bodies.
This for the first time, will make the managers and boards be accountable for their decisions individually, and severally.
This is aimed at improving the levels of decision morality, transparency, accountability and integrity among persons in positions of responsibility.
The Public Finance Act has also given powers to the Secretary to Treasury to deal with non-performing and earring controlling officers (Permanent Secretary) and controlling bodies.
The Act has also given the Treasury Revenue targets for Ministries, provinces and other spending agencies.
This is aimed at enhancing revenue generation to finance annual budget to improve on budget predictability and credibility.
Meanwhile the new Public Finance Management Act no.1 of 2018 has provided for a specific part dealing with financial misconduct to deter would-be-offenders.
Some of the offenses under the Act include those doing functions of Ministry of Finance;
1. Any official that opens a bank account for public or official use
2. Borrows money on behalf of a public body or converts an existing due payment into a loan
3. Issues public securities, or varies the terms and conditions of issued public security or existing contract
4. Lends money or any assets of a public body
5.issues letters of guarantees or indemnities on behalf of the public body
6. Disposed of or pledges or encumbered property of a public body
7. Refuses or omits to pay any public money into official bank account
8. Incurs unauthorized expenditure or makes unauthorized commitments
In accordance with the Act, any person who breaches provisions of the Public Finance Management Act No. 1 of 2018, will be fined, suspended, demoted, dismissed, or prosecuted accordingly.